Technical oscillators are in favour of a short-term recovery during which the aforementioned 1.2746 area might be tested once again. It should be noted that there is still potential until the upper channel boundary circa 1.2780.
However, it is unlikely that it is realised in the following 24 hours, as the overall market sentiment is shifting slightly towards bears.
The US Dollar was fluctuating with no distinctive direction against the Loonie, as the pair remained near the 55-, 100–, 200-hour SMAs, the weekly and monthly PPs on Tuesday.
The same lack of momentum was apparent this morning. Even though bulls are not pushing as hard towards the upper channel boundary as on Monday, the Greenback is nevertheless moving towards the given line.
Technical indicators favour a slight correction, possibly down to the 100-hour SMA at 1.2712. The US Dollar is still likely to test the combined resistance of the upper channel line and the weekly R1 circa 1.2780.
It is yet unclear if this pattern is breached tomorrow; however, the rate might continue trading sideways and thus overcome this barrier later in the week.
As expected, the Greenback managed to push until the upper channel boundary during the last 24 hours. The pair reached this line within a couple of hours on Thursday and has been trading along it ever since. The US Dollar was stranded between the weekly R1 and a support cluster formed by the 55-day SMA and the monthly PP mid-session.
Meanwhile, the steepness of the descending channel suggests that the rate might not be able to hold in this pattern any longer. In the short term, however, it is expected that the US Dollar trades between the weekly R1 and the 200– and 100-hour SMAs along the upper channel line.
The pair should be tended slightly south; however, the strength of the aforementioned support cluster is likely to restrict any intention to edge even lower.
During the past 24 hours, the US Dollar has been dashing through various support/resistance levels, testing their boundaries for several hours but nevertheless failing to show any distinctive direction.
The combined US/Canadian data release changed drastically this lack of movement. Even though Canada’s CPI was in line with expectations, solid US building permits initiated a buying spree for the US Dollar. As a result, the rate surged 40 pips within the first 15 minutes after the release.
As apparent on the chart, the Greenback has been trading in a channel up for the last six sessions. It is likely that the rate continues to move upwards after a minor correction south. This would in turn breach this junior channel and allow the Greenback to approach the weekly R2 at 1.2880.
Following the US/Canadian data releases mid-Friday, bears took the upper hand and pushed USD/CAD out of the strongly overbought territory. This movement southwards led the Greenback down to the combined support of the 55– and 100-hour SMAs and the weekly PP circa 1.2760. The pair has since failed to leave this area.
The US Dollar might still try to push lower within the following trading hours, but given the strength of this cluster, it is likely that subsequent bearish momentum is muted. This could lead to the rate trading in the same consolidation phase which was apparent on Monday morning.
Conversely, technical indicators point to a strong up-trend. This scenario, however, is unlikely to materialise, as the bearish momentum should to surrender so easily by mid-Tuesday.
USD/CAD was driven by upside momentum during the last session. The combined support of the 55– and 100-hour SMAs and the weekly PP circa 1.2760 pushed the rate until the upper boundary of the junior channel at 1.2840 prior to falling down to the 55-hour SMA.
The pair’s movement during the past four weeks reveals the existence of a descending channel. Its upper boundary is located near 1.2880 , thus suggesting that the Greenback might still be tended north this week.
Daily technical indicators shows that the 55-hour SMA could support the rate once again, thus allowing for further advance. The most probable upside barrier could be the weekly R1 at 1.2839.
Conversely, even if the 55-hour SMA is breached, the 100-hour SMA and the weekly PP should support the rate.
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